Sox 404 - Public Companies

SEC Issues Formal Rule Deferring Auditor Attestation of ICFR by Small Public Companies. As reported in our Daily News for October 5, 2009, the Securities and Exchange Commission (SEC) announced that the smallest publicly reporting companies will be required to comply with Section 404 of the Sarbanes-Oxley Act of 2002 requirements related to audits of their assessments of internal control over financial reporting (ICFR). On October 13, 2009, the SEC issued a final rule, Internal Control over Financial Reporting in Exchange Act Periodic Reports of Non-Accelerated Filers. This final rule is consistent with the SEC’s earlier announcement, but clarifies which smaller public companies are covered.

The final rule requires all non-accelerated filers to provide their auditor’s attestation on management’s assessment of ICFR in their annual reports filed for fiscal years ending on or after June 15, 2010. Prior to that time, a non-accelerated filer continues to be required to state in its management report on ICFR that the company’s annual report does not include an auditor attestation report. The scope of the final rule includes all “non-accelerated filers,” which is a term used to refer to a Securities Exchange Act of 1934 reporting company that does not meet the definitions of either an “accelerated filer” or “large accelerated filer” provided in SEC Rule 12b-2.